Transferring or gifting property to a family member can be as simple as submitting a property transfer form, but there are costs involved – even when the property is given as a gift.
Generally, you can not avoid all of the costs involved so it's unlikely you'll be able to gift a house to a family member or relative for free.
The 2 big fees you may be liable to pay are stamp duty on the market value of your property, and potentially capital gains tax (CGT) if it was an investment property.
What is a property title and why does it cost money to transfer it?
A property title is a legal document that holds all the information about a property. It includes details on who owns the land or has a mortgage on it.
When the owner changes, either through gifting or through selling it, the title needs to be legally updated.
Do you have to pay stamp duty on a gifted property?
You have to pay stamp duty on the market value of your property. Even if no money changes hands, the transfer will be considered to have been done based on the property's market value. The government uses this "true" valuation to determine the stamp duty and CGT costs regardless of the discounted selling price.
When transferring a property to a family member, the Australian Tax Office (ATO) says you need to make an effort to get an actual value to estimate from.
"You should obtain a valuation from a professional valuer, or work out the market value yourself using reasonably objective and supportable data," they say. "This can include the price paid for very similar property that was sold at the same time in the same location."
For some examples:
On a property worth $500,000 transferred in QLD, the stamp duty is around $20,000.
On a property worth $600,000 transferred in WA, the stamp duty is around $32,500.
On a property worth $700,000 transferred in VIC, the stamp duty is around $39,000.
On a property worth $800,000 transferred in NSW, the stamp duty is around $31,000.
If the person receiving the gift of the property has not owned a property before, they may be entitled to a discount or waiver on stamp duty.
What if you're gifting part of a property to someone?
Stamp duty is only payable based on how much of the property is being transferred to another person.
One of our readers reached out and asked, "When selling a1/2 of your property to your child, do they pay stamp duty on the full value of the property, or only on the version they are buying?"
The answer is, you only need to pay stamp duty on the part of the property that is changing ownership. In this scenario, if the parents are gifting half of the property to their child, then that recipient would pay stamp duty based on half of the property's value.
Does anything change depending on the state or territory you live in?
Yes. The law around transferring property titles is Australia-wide, but the rules on stamp duty are different in each state and territory.
There are 2 ways you can transfer a property to a family member: gifting and selling.
Gift
You can give ownership of your property to a family member as a gift. No money changes hands in this scenario, but this requires filling out the necessary paperwork with your state revenue office and title office. Your conveyancer may advise you to organise a deed of gift as well. If the property was an investment and not the seller's primary residence, there will likely be CGT costs as well (more on that below).
Sale
You can sell your property to a family member. You will be liable for stamp duty and it will be calculated based on the property's market value, and not the sale price. For instance, Also, if the property is not the seller's main residence (say, if it was an investment property) then capital gains tax will probably apply as well.
What costs will you pay when transferring property to family?
Below are a few examples of fees and charges that may apply when you are transferring or gifting property within your family:
Costs paid by the original owner
Valuation costs. You might need to have the property value determined by a certified valuer before transferring or gifting your property. This is so you know how much to report that you have gained or lost when filing your income taxes. Independent valuations cost between $300 and $900 depending on where the property is.
Legal fees. You should have a conveyancer or solicitor oversee the property transfer and have them draw up contracts or transfer documents with title details, the value and determined price of the property, as well as personal details for both parties. These legal documents can be used in case the validity of the property transfer is ever questioned.
Capital gains tax (CGT). The CGT cost will depend on the amount of capital gain or capital loss resulting from the CGT event. In the event of a capital gain, your total gain amount will be the difference between your capital proceeds and the cost base of your asset. The actual CGT amount you pay depends on your income, as it's added to your income tax for the applicable year. Read more about CGT when selling in our in-depth guide.
Costs paid by the new owner
Stamp duty. Also referred to as stamp duty land tax, this tax is calculated on the value of the property or land that is being transferred or gifted and is represented as a percentage. Some purchases may be exempt from stamp duty, so check with your state or territory office of revenue. Stamp duty is calculated based on the state or territory you're in.
Legal fees. You should have a conveyancer check over everything before signing, and the fees for this can range from a few hundred dollars up to $1,000.
Vanessa and Adnan own a home in NSW. They sell it to their son Al for $500,000, knowing that its true value is actually $900,000. Al pays them $500,000 and Vanessa and Adnan get a professional property valuer to look at the property. The valuer puts the property's market value at $900,000.
Al's costs therefore are:
Sale price: $500,000
Stamp duty (calculated on $900,000 for first home buyers): $20,200
Vanessa and Adnan have used the house as their primary residence for more than 10 years. Therefore they won't have to pay CGT.
* This is a fictional, but realistic, example.
Can you avoid fees and charges when transferring property?
Not entirely. When you gift your property you are still charged stamp duty, even if you sell the property for a small amount to a family member or friend. As the ATO states, the property is calculated at market value if you:
Receive no money for your property
Receive less than the market value for your property; or,
Do not deal at arm's length with the buyer during the sale event
Dealing at arm's length refers to both parties in the sale acting independently and having no "influence or control over each in connection with the transaction".
You might be able to avoid hefty fees when transferring or gifting properties in some select situations and scenarios where CGT and other charges will not apply. Below are some examples of these situations:
If you acquired the asset before 20 September 1985: This date is when CGT came into effect, so any property or assets that were acquired before this date may be exempt from CGT.
If the property being transferred is your home (main residence): If you have been living at the property and have indicated it as your main place of residence (i.e. the address is on your current driver’s licence and you receive mail there) then you may be exempt from CGT when gifting or selling a property to another.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio
Richard's expertise
Richard has written 553 Finder guides across topics including:
From supply and demand through to location, facilities and planned infrastructure projects, there are plenty of factors that can influence property value.
Hi I have a family member living in south australia in a residential property. It is his main place of residence and the property was bought in the 1970’s. He wishes to gift it to me using a deed of gift in which we have both signed. What documents do I have to complete and submit in order to complete the transfer of the property into my name. I live in Western Australia. I understand I will have to pay transfer fees and stamp duty. I do not know what forms to complete the transfer or where to submit them? Can you help with this
BelindaFebruary 3, 2016
Hi Paul,
Thanks for reaching out.
If you would like to transfer the property into your name, you will need to complete and submit a transfer of title form which you can access from the Land Services and Lands Title Office on the South Australian government website.
I am planning to buy a flat, I will be opting for loan and paying it.Once the loan amount is paid I would like to transfer or gift the flat to my mother.How can I do this without actually paying the stamp duty charges while transferring it . What all charges I will have to pay.
BelindaFebruary 2, 2016
Hi Svy,
Thanks for reaching out.
Above on this page, you can view the potential costs of transferring property ownership for both the original owner and the new owner.
If you transfer the property ownership to your mother, you may be liable for capital gains tax (CGT) (which is generally calculated using the market value of the property less your cost base), valuation costs which may vary from $300 – $900 (depending on the property location) and legal charges which will depend on the fee structure of the legal practitioner and the complexity of legal work required but this could cost around $250 per hour on average.
As the new owner of the property, your mother may be liable to pay stamp duty, however some transactions may be exempt so it’s best that you check with your state office of revenue.
Kind regards,
Belinda
blakeJanuary 8, 2016
My brother and i inherited my mothers house and he is allowing me to change title deed to my name without me having pay any money for his share but person issuing form said this could have tax/other complications and i should get some advice before proceeding.
Can you shed any light on what they may have been alluding to?
Many thanks
Finder
MarcJanuary 11, 2016Finder
Hi Blake,
thanks for the question.
In some situations capital gains tax can be applied to inherited properties, although some exemptions are available. I would recommend contacting the ATO or an accountant to find out specifically what taxes or charges could apply to you in this situation.
I hope this helps,
Marc.
KerriJanuary 5, 2016
HI My husband’s parents have a farm which is being left to him in the will. We are in the process of taking control of the farm and his parents are keen to enact the will prior to death by transferring ownership now. The house will remain his parents residence ie we won’t be living there, but the land and most of the infrastructure will be ours for the purpose of operating the business.
What are the potential costs we will need to factor in and is CGT applicable? The farm has been owned by the parents for over 60 years.
Many thanks
BelindaJanuary 6, 2016
Hi Kerri,
Thanks for your enquiry.
If the asset was acquired before 20 September 1985, capital gains tax (CGT) will not be applicable when transferring the property ownership from your husband’s parents to you and your husband. However, other costs that you may need to pay include stamp duty tax which will be based on the market value of the property– however some purchases may be exempt so you’ll need to confirm this with your state office of revenue.
You may also need to pay valuation and legal charges which will be determined by the independent provider. If you need further advice regarding this transaction, you can fill out the form above on this page to speak with a property tax specialist.
Kind regards,
Belinda
LionelDecember 8, 2015
I have a holiday home owned by a Discretionary Family Trust. I am the sole Trustee
and the Guardian and Appointer
If I change the Trust Deed and make my daughters the trustees do I still have to pay CGT on the current market value?
In 5 years after the amendment will this asset no longer be considered part of the assets test in determining my eligibility
for an Australian pension?
BelindaDecember 9, 2015
Hi Lionel,
Thanks for your enquiry.
Generally speaking, you will be charged capital gains tax (CGT) when transferring property within the family. The property will be calculated at market value when you receive no money for your property, receive less than the market value or do not deal at arm’s length with the buyer during the CGT event.
You can learn more about the eligibility requirements for the Australian Age Pension including income tests and asset requirements. Keep in mind that there are restrictions on the amount of assets you can own in order to receive the benefit. For every $1,000 your asset is worth, the pension will be reduced by $1.50 per fortnight.
If you need further clarification, you should get in touch with the Department of Human Services or Centrelink to discuss how the ownership structure of this asset may affect your ability to qualify for the pension.
I hope this helps.
Thanks,
Belinda
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Valuation costs. You might need to have the property value determined by a certified valuer before transferring or gifting your property. This is so you know how much to report that you have gained or lost when filing your income taxes. Independent valuations cost between $300 and $900 depending on where the property is.
Hi I have a family member living in south australia in a residential property. It is his main place of residence and the property was bought in the 1970’s. He wishes to gift it to me using a deed of gift in which we have both signed. What documents do I have to complete and submit in order to complete the transfer of the property into my name. I live in Western Australia. I understand I will have to pay transfer fees and stamp duty. I do not know what forms to complete the transfer or where to submit them? Can you help with this
Hi Paul,
Thanks for reaching out.
If you would like to transfer the property into your name, you will need to complete and submit a transfer of title form which you can access from the Land Services and Lands Title Office on the South Australian government website.
You might be interested to read our guide about the process and costs involved when changing property ownership.
You should consider speaking to a conveyancer or solicitor. They can help you with issues related to ownership and property law.
Thanks,
Belinda
I am planning to buy a flat, I will be opting for loan and paying it.Once the loan amount is paid I would like to transfer or gift the flat to my mother.How can I do this without actually paying the stamp duty charges while transferring it . What all charges I will have to pay.
Hi Svy,
Thanks for reaching out.
Above on this page, you can view the potential costs of transferring property ownership for both the original owner and the new owner.
If you transfer the property ownership to your mother, you may be liable for capital gains tax (CGT) (which is generally calculated using the market value of the property less your cost base), valuation costs which may vary from $300 – $900 (depending on the property location) and legal charges which will depend on the fee structure of the legal practitioner and the complexity of legal work required but this could cost around $250 per hour on average.
As the new owner of the property, your mother may be liable to pay stamp duty, however some transactions may be exempt so it’s best that you check with your state office of revenue.
Kind regards,
Belinda
My brother and i inherited my mothers house and he is allowing me to change title deed to my name without me having pay any money for his share but person issuing form said this could have tax/other complications and i should get some advice before proceeding.
Can you shed any light on what they may have been alluding to?
Many thanks
Hi Blake,
thanks for the question.
In some situations capital gains tax can be applied to inherited properties, although some exemptions are available. I would recommend contacting the ATO or an accountant to find out specifically what taxes or charges could apply to you in this situation.
I hope this helps,
Marc.
HI My husband’s parents have a farm which is being left to him in the will. We are in the process of taking control of the farm and his parents are keen to enact the will prior to death by transferring ownership now. The house will remain his parents residence ie we won’t be living there, but the land and most of the infrastructure will be ours for the purpose of operating the business.
What are the potential costs we will need to factor in and is CGT applicable? The farm has been owned by the parents for over 60 years.
Many thanks
Hi Kerri,
Thanks for your enquiry.
If the asset was acquired before 20 September 1985, capital gains tax (CGT) will not be applicable when transferring the property ownership from your husband’s parents to you and your husband. However, other costs that you may need to pay include stamp duty tax which will be based on the market value of the property– however some purchases may be exempt so you’ll need to confirm this with your state office of revenue.
You may also need to pay valuation and legal charges which will be determined by the independent provider. If you need further advice regarding this transaction, you can fill out the form above on this page to speak with a property tax specialist.
Kind regards,
Belinda
I have a holiday home owned by a Discretionary Family Trust. I am the sole Trustee
and the Guardian and Appointer
If I change the Trust Deed and make my daughters the trustees do I still have to pay CGT on the current market value?
In 5 years after the amendment will this asset no longer be considered part of the assets test in determining my eligibility
for an Australian pension?
Hi Lionel,
Thanks for your enquiry.
Generally speaking, you will be charged capital gains tax (CGT) when transferring property within the family. The property will be calculated at market value when you receive no money for your property, receive less than the market value or do not deal at arm’s length with the buyer during the CGT event.
You can learn more about the eligibility requirements for the Australian Age Pension including income tests and asset requirements. Keep in mind that there are restrictions on the amount of assets you can own in order to receive the benefit. For every $1,000 your asset is worth, the pension will be reduced by $1.50 per fortnight.
If you need further clarification, you should get in touch with the Department of Human Services or Centrelink to discuss how the ownership structure of this asset may affect your ability to qualify for the pension.
I hope this helps.
Thanks,
Belinda